Senator Richard C. Shelby (R-Ala.), a member of the Defense Appropriations Subcommittee, today sent a letter to Secretary of Defense Robert Gates underscoring his concerns regarding the upcoming tanker recapitalization competition.
“It would be a grave mistake, with severe consequences to both our economy and trade relations, to use a preliminary WTO report as justification for restricting the ability of our military to procure the best equipment possible,” said Shelby.
The full text of the letter is below.
September 16, 2009
The Honorable Robert M. Gates
Secretary of Defense
1000 Defense Pentagon
Washington, D.C. 20301-1000
Dear Secretary Gates,
I am deeply concerned regarding the upcoming tanker recapitalization competition. Clearly, the competition for the Air Force Tanker Replacement Program is as tense as it is significant. In such an environment, competitors often will make statements to the press that they realize are not entirely accurate. This has been the case with many Boeing supporters who want to leverage a preliminary World Trade Organization (WTO) report, that due to confidentiality agreements cannot be publicly disclosed in its entirety, to supersede the interest of the warfighter and damage our trade relationships.
Secretary Gates, here are the facts:
• The WTO preliminary report on September 4, 2009, involves subsidization of civil aircraft – not military airframes. Further, the A330-200, the airframe that Northrop Grumman/EADS will offer for the tanker contract, was not found to have received funding that was considered a prohibited subsidy.
• The preliminary report covers only one of two parallel claims in a commercial dispute over government support in the form of “subsidies” to both Airbus and Boeing. This preliminary report begins a three-year process of responses and appeals. The second decision, a pending case against the U.S. by the European Union challenging various U.S. federal and state subsidies to Boeing, will be determined this winter.
• The report does not outline or authorize sanctions from the WTO or any member nation.
• Through multi-lateral agreements, WTO member nations have agreed not to unilaterally act before the WTO process is concluded.
• Any sanction or penalty created through a U.S. government contract in response to this report would violate Article 23 of WTO rules.
• The Government Procurement Agreement, a 1996 treaty signed by many developed countries, including the United States and the European Union member states, forbids signatories from discriminating against foreign companies in procurement contracts for any reason other than the quality of a bid.
As Ambassador Kirk stated in a meeting with me on September 10, Boeing was not materially injured by any action taken by Airbus. It would be a grave mistake, with severe consequences to both our economy and trade relations, to use a preliminary WTO report as justification for restricting the ability of our military to procure the best equipment possible.
While inaccurate and unsupported claims will likely continue to dominate the Boeing supporters’ argument, there is one fact that we all can agree on -- the Air Force needs to buy the most modern, capable, versatile, and cost-effective tanker currently available. We must insist that the process work without irresponsible congressional intervention. Vigilante justice by Members of Congress simply must not be tolerated. The men and women who we care about most - the warfighter - deserves no less.
cc: The Honorable Michael Donley, Secretary, U.S. Air Force
Ambassador Ron Kirk, U.S. Trade Representative